Visa Suspends Multiple Bitcoin Debit Cards

erickpinos (52)in #cryptocurrency • 6 years ago (edited)

Around the middle of 2017, I decided to try to stop using dollars. I put my entire net worth into cryptocurrencies and I wanted to cash out as little as possible. I wanted in on the volatility and I wanted in on this future payment system. I started paying for food with bitcoin on GrubHub, paying for flights with bitcoin on Expedia, paying for computer parts with bitcoin on Newegg and buying gift cards with bitcoin on Amazon. I paid my friends back with bitcoin instead of Venmo. I used the Bitcoin ATM across my street whenever I got more cash. I did Christmas shopping for my family at the MIT COOP, our school store, which accepts Bitcoin. I even tried to get my fraternity to accept Bitcoin for rent, as the NYU chapter of my fraternity did in 2014.

But it still wasn't enough. I still had to cash out my crypto for miscellaneous purchases. Each of these transactions would take several business days to arrive in my bank, during which I would have no access to my funds and be at the bank's mercy. Many times I had no money in my bank account when I needed it. I was even trapped at the Beijing Airport for 24 hours with no money and thus no food, transport, or stay when my bank blocked my account and wouldn't unblock it because it was the weekend and no one was at work.

Anyways, I started hearing about Bitcoin debit cards. They work different from card to card, but the basic premise is you can spend bitcoin to load up your card with dollars and use that for purchasing. The conversion was done in minutes, as opposed to cashing out from exchanges, which took days. I finally put in an order for my very own BitPay Debit Card, powered by Visa and usable at any place that accepts Visa worldwide. I was excited that soon I could be 100% in cryptocurrencies and never have to "cash out" crypto to slow banks again.

Sadly, Visa announced early today, less than 6 hours after I had put in my order, that it was cancelling its services for several major Bitcoin debit cards.

According to a statement put out by BitPay,

"Yesterday our European BitPay Card issuer WaveCrest Holdings, Ltd. received direction from Visa® to immediately close all accounts of its prepaid Visa® debit card programs. The BitPay Card (non-US) is one of these programs, along with other cryptocurrency-related and standard prepaid Visa® debit cards. Unfortunately, WaveCrest was unable to provide us or cardholders with more time to prepare for this change."

From CoinDesk's article, it's clear that the BitPay cancellations is limited to European customers. But I have a gut feeling that it's only a matter of time before they find a reason to cancel cards for US customers too.

Other companies also had to shut down their services, including Bitwala, Cryptopay, Wirex, and TenX.

However, TNW received a quote from Visa saying that the issue was not the use of cryptocurrencies, but rather WaveCrest violating Visa's membership regulations.

We can confirm that WaveCrest’s Visa membership is being terminated due to continued non-compliance with our operating rules. All of WaveCrest’s Visa card programmes will be closed as a result.

Visa has other approved card programmes that use fiat funds converted from cryptocurrency in a number of jurisdictions. The termination of WaveCrest’s Visa membership does not affect these other products.

Hopefully this means that these cards will become usable again when their respective companies find new providers. But at the end of the day, Bitcoin debit cards are a band-aid solution. Hopefully one day in the future, no centralized provider will be able to take someone's money away because that person trusted them to keep it safe.

I still think BitPay debit cards are the easiest to use and are worth checking out if you're a US customer. Link at https://bitpay.com/card

Sources / Further Readings

https://www.coindesk.com/visa-cracks-bitcoin-debit-cards-europe-providers-say/
https://thenextweb.com/hardfork/2018/01/05/spending-bitcoin-with-a-debit-card-just-got-a-lot-harder/

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